#1297 Darius Dale | Bitcoin Data Is Giving The Green Light?!

— The macro weather model has shifted from bullish to neutral signals for stocks and Bitcoin over the next three months, driven by an inflection in sovereign fiscal balance to nominal GDP ratio signaling reduced fiscal impulse.

— Global liquidity is trending higher from both central bank and commercial bank sources, with leading indicators suggesting liquidity creation will likely persist for at least another quarter or two.

— Fiscal stimulus is cooling in 2024: Medicare and Social Security cost-of-living adjustments fell from 9% in 2023 to ~3% in 2024, and year-over-year federal budget deficits have shrunk from $834 billion in June to $364 billion in December.

— U.S. household leverage remains sustainable despite rising credit card debt; debt service ratios relative to income are near all-time lows, and revolving credit as a percentage of disposable income has been flat at ~5% for 15 years.

— Bitcoin ETF approval is a structurally positive fundamental; as inflation persists and the 60/40 portfolio becomes less attractive, Bitcoin may capture a growing allocation as part of a 60-30-10 portfolio construction model.

— Immaculate disinflation could unwind in coming weeks depending on labor cost reports (JOLTS, Employment Cost Index, unit labor costs, productivity, jobs report), which could shift market pricing toward a "no landing" scenario with increased volatility.

— Macro weather model signals for stock market and Bitcoin shifted from bullish to neutral, indicating expected normal returns and volatility over the next three months rather than outperformance.

— Sovereign fiscal balance to nominal GDP is now in a rising regime, projecting negative excess returns for stocks, commodities, and Bitcoin at the margins.

— USD real effective exchange rate is currently in a rising condition contributing negative excess returns to crypto; a negative trend in the dollar (a risk given overvaluation on a real basis) could contribute positive returns to Bitcoin.

— Federal budget deficit dynamics show slowing fiscal impulse: June deficit was +$834 billion year-over-year, August +$535 billion, December +$364 billion, with 2024 expected to range $200–$400 billion monthly.

— Household debt ratios remain favorable: debt service ratios are near all-time lows relative to household income; credit card revolving debt is flat at ~5% of nominal disposable income despite rising APRs (25–30%).

— Monitor the upcoming JOLTS report, Employment Cost Index, unit labor costs, productivity, and jobs report over the next few weeks; if immaculate disinflation unwinds, markets may reprice toward a "no landing" scenario with higher volatility in bonds and broader asset markets.

— Rebalance portfolio allocations beyond traditional 60/40 stocks/bonds toward a 60-30-10 model (60% stocks, 30% bonds, 10% alternative assets like Bitcoin) as persistent inflation erodes inverse stock-bond correlation and reduces 60/40 attractiveness for institutional investors.

— Global liquidity is expected to remain supportive for at least one to two quarters from commercial banks and non-bank financial participants; use this window to assess risk positioning, but remain aware that the macro weather model signals are now neutral rather than bullish, reducing the margin of safety for risk assets.